good saturday afternoon to you. i'm craig melvin. you are watching msnbc, the place for politics. less than three days until the so-called fiscal cliff and congress still trying to hammer out a deal. they've had 515 days to work this out. still, though, capitol hill leaders are at an impasse and starting next week, you and i could see our paychecks cut as payroll taxes go up and that could be just the beginning. the clock at the bottom right of your screen there might as well have a blaringa, large on it because come midnight monday if lawmakers have not found the fiscal cliff solution you're going to hear a whole heck of a lot of noise. let's get straight to washington. nbc's kristen welker at the white house and luke russert is tracking developments at capitol hill and nbc news senior political editor mark murray is here to break it down for us from the washington bureau.

we will start with kristen. last we heard, kristen welker, the president came out to report that he is modestly optimistic. has the rhetoric changed at all today? >> reporter: it has changed a little bit. the president is still modestly optimistic, but i just spoke with a democratic source who tells me at this hour a deal is looking doubtful. of course, we want to underscore the fact that these negotiations are very fluid so that characterization could change at any moment, but it seems as though the discussions going on behind the scenes right now have yet to bear fruit and right now we do have the focus on the senate. majority leader reid and mitch mcconnell trying to hammer out a deal that would, to some extent extend the bush-era tax cuts for those making $250,000 although we might see that number go up to 400,000, 500,000 if there is some type of a deal. the president has called on a

deal to extend unemployment insurance benefits so that is another aspect that they're negotiating, but clearly, these negotiations are difficult. they have been from day one and that is why we are seeing them go to the 11th hour, but again, as of right now one democratic source expressing skepticism about getting something done by the all-important deadline. craig? >> the president, of course, appearing on "meet the press" tomorrow. is there a sense that the white house needs to stay out in front of this to convince americans that he's doing his part to reach a settlement before zero hour? >> think that is part of it and we've seen president obama take this tactic before. during the payroll tax cut fight, you'll remember he ran out and talked to people in different states and tried to ramp up pressure congress in that way. last night president obama came out, addressed the nation and again tried to turn up the heat on congress by saying essentially that americans are fed up. he tries to bring the public into this debate to increase

pressure, so certainly the interview on "meet the press," currently a part of that strategy and the president and his staffers watching these negotiations quite closely going on behind the scenes. >> kristen welker, thanks. we'll come back to you later. >> over to capitol hill now, luke russert is standing by. luke, what are you hearing, if anything, about progress today? >> reporter: this morning, craig, there were a hints of optimism and that's subsided to a degree. as kristen mentioned. there are sources close to the talks that say no deal has been reached and again, these negotiations are fluid. they go up and down. it's not an easy road to get to these things at the end and especially at the 11th hour. it's windy. mitch mcconnell is at the capitol and assuming he's in contact with harry reid and their staffs are going back and forth. the question has been every single day we've been into these negotiations. what is the threshold that republicans are willing to take to avert the fiscal cliff.

there's their 400,000. so everyone who makes $400,000 their taxes would stay the same. would that be acceptable. if there is no deal to be reached we do know that harry reid will try to move forward on monday with the bill for those making $250,000 or below. so that's what we need to see how it will work there. there are types of sweeteners they can do. mitch mcconnell is a tough place and this is the underreported part of the story. he has to figure out a deal that gets through the senate and doesn't make john boehner look too bad in the house and there are a lot of conservatives in the house that don't want to do any type of deal that would raise taxes on anybody even though they'll go up on the entire country the first tax hike in 20 years after monday night. >> and one would also assume that mitch mcconnell would have to back a grant, he could face a

primary fight if this thing -- >> you touched on one of the great sub plots of these entire negotiations is personal things that boehner and mcconnell have in these negotiations. obviously, mcconnell doesn't want to have someone on the right come after him because he was in favor of a tax hike and john boehner's re-election as speaker of the house. and that would come across as a vote of no confidence. very embarrassing and they don't expect it happening and there's a lot at stake for mitch mcconnell and john boehner personally. great point you brought up. >> if the senate fails to come up with something, does the president have the votes? >> reporter: if harry reid got this through the senate, i.e., that he got all democrats onboard for the 250 or below and he was able to pick up retiring republicans and maybe he gets

olympia snowe from maine, scott brown and folks like that and get to the 60 threshold and break the filibuster and if he was able to do that and it went to the house floor, there's no doubt it would pass and probably get enough republicans at the end of the day. the question is a, would he be able to break the filibuster in the senate, we don't know if that would happen. would boehner put it on the house floor and he said from day one, any plan he would like to see the majority and the republicans in the house move forward. if it were to go to the house i am very confident from conversations i've had that it would pass. >> nbc's luke russert. always appreciate the insights. >> nbc news senior political editor mike murray also digging this joining me live. president obama using the bully pulpit of his office to put pressure on congress. "meet the press" tomorrow and take a listen to part of what he said yesterday afternoon. take a listen.

>> if an agreement isn't reached in time between senator reid and senator mcconnell, then i will urge senator reid to bring to the floor a basic package for an up or down vote. >> up or down vote. what kind of pressure would that put on members of congress? >> this is all about the blame game, craig. it takes 60 votes to do almost anything in the u.s. senate. for president obama calling for an up or down vote, for the senate which rarely happens he would be saying if any republican or groups of republicans ends up blocking the legislation, they would be the ones who would be blamed for going over the fiscal cliff and luke russert just outlined something else, too, if you even get 60 votes that then goes to the house the question is does house speaker john boehner and republicans allow that to come to the vote. if they don't, they'll be the ones to get the blame. so president obama was using his bully pulpit and the statement he gave yesterday and he'll be on "meet the press" tomorrow and

even his weekly radio address all on this political topic. >> this pressure by the president on congress, how will this play out when it's time to start negotiations on the debt ceiling because best we can all tell, the raising of the debt limit will not be a part of any deal so we'll be having similar conversations in february. could there be resentment on the other side of the aisle? >> oh, absolutely, particularly if republicans feel they got rolled on this. the debt ceiling is the big leverage they hold on this entire debate. we've heard president obama say he's not going to play the same game he played in 2011 saying they got taken as hostages in a situation and debate that ends up hurting the u.s. economy. president obama says he doesn't want to do that again and it will be interesting to see how he maneuvers because congress will end upholding a vote and saying that congress no longer

has the power on raising the debt limit. that remains to be seen and it will be interesting to see what president obama says when he's asked a question like that. >> mark, we'll come back to you later. joining me also from d.c., david nabbing murrah of "the washington post. this won't be confusing at all. >> no way. >> david nakamura, we'll start with you. a lot of talk about progress in the last 24 hours. as an example, let me quote "the new york times." i have a positive feeling now. this is senator kay bailey hutchison, republican of texas who said a burst of a deal talk broke out as soon as they left the capitol. harry reid was sounding the death knell. what happened yesterday, david? >> congressional leaders came to the white house and had direct talks with the president and john boehner continues to say, look, new it's up to the senate

to take action and so there is -- what was noticed on these negotiations and the question is go going, and that's the sticking point and we're waiting to see what happens and we're running out of time and as the other guests have said, it will be up to the house to see if they can get it through. >> i want to throw it up on the screen so folks at home can appreciate when we're talking about and what it will mean for people if no deal is reached. the bush tax cuts expire for all americans. that means everyone's taxes go up. the payroll tax holiday will expire which means roughly $1,000 decrease in take home pay for the the average worker. unemployment insurance goes away for more than 2 million people. the sequester as well, $110 billion in automatic spending cuts to defense and other

domestic programs. that's going kick in, as well. 30 million more americans will be hit by the amt, the alternative minimum tax and the estate tax. it goes on. it goes on. it goes on. why, david jackson, haven't people started screaming from the streets and screaming from the rooftops about what this mean, this is a manufactured crisis. >> well, they haven't felt it in their paycheck and they will after january 1. the government will be taking more out of their paychecks and when the tax time will roll by in april, they'll feel it and businesses will feel it. once people will see they're losing money on this deal you'll see more public outrage about it. >> david naka, mura, calling for an up or down vote if the senate can't come up with it. he's talking about 250,000, at one point 400,000. is it realistic to think that the president can win this thing on an up or down vote?

>> if they actually go to an up and down vote there will be a lot of pressure on those who were against a temporary fix with this to make their case known and actually go on the record. that's why the question is would the republican senators who would oppose this thing at the $250,000 level, they would use some of the mechanisms they have like the fill buster and things that the public doesn't like, but they're certainly part of the tools that the senators have to object to these things. would they block it? as mark murray said, this is about the blame game and setting up and if you'll block it, go on record to do so or you'll take the blame. >> david jackson, politically, what, in any, is the advantage to simply kicking the can down the road and allowing the next congress to craft a major debt reduction deal. >> on january 1, everyone's taxes will go up if only the expiration of the george w. bush tax cuts and this gives congress

the opportunity to give it away and they can honestly say we're voting to cut taxes and the feeling is that might make it easier for the congress to deal with this. david jackson, usa today, we'll see you later in the hour, as well. bungee jumping, going down a bunny slope. not talking about adventure sports. these are the scenarios that people are scribing when it comes it the fiscal disaster that congress is trying to avoid. a congressman joins me with his alternative view on it all next. then, what's truly happening behind closed doors in negotiations between leaders right now. two former wheelers and dealers from capitol hill will give me their take as well. you are watching msnbc, the place for politics, even on a snowy saturday afternoon. ♪ ♪ [ laughter ] smoke? nah, i'm good. ♪

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we are right at the deadline. as a matter of fact, it looks like we will be here on new year's eve and possibly new year's day. they've already alerted us, members of the house, at the possibility of doing that. >> that was democratic congressman elija cummings with the government reform committee on our air just a couple of hours ago. he's made it clear at that time fiscal cliff deadline may not be met. joining me live to talk about scenarios ahead, former pennsylvania representative and 2010 senate candidate as well, joe sestak, always good to see you. >> good to see you, craig. >> right now ideas are being debated behind closed doors and you suggest we shouldn't be talking so much about a fiscal cliff, per se. we should be talking about a bunny slope. describe what you think should happen. >> the fiscal cliff means we're taking $700 billion out of the

economy because of the tax increases and spending cuts. if that happens our economy will hit rock bottom. we'll have zero growth over 2013. we will have, by the end of 2014, double digit unemployment. millions of americans will lose employment. so what you want to do is change the scale of that fiscal cliff to a gentle, let's say, bunny slope. we have a fragile economy, but it's accelerating and it's predicted as this year to grow. it grew at 2% to goh at 3% or more this coming year so you want this skier, so to speak to go down the slope and pick up speed so when you do come to the grand bargain that has $3 trillion of debt reduction. all they've got to do is shoulder 1 billion, changing the scale and put the rest of that in the following nine years and

that's something that they'll come up with. >> where do they find it? there are various places, and just that, there's $118 billion if you didn't do the payroll tax extension holiday and if you didn't do that at $250,000, that's almost the same equivalent amount or if you wanted to step back and say hey, let's make sure that these defensive, domestic sequestration cuts of $100 billion and half of that and you can take smalles poohes of that and come up to $100 million and know that it will grow close to 3%. that's the key, and that's why they're behind closed doors today. coming up with that, you don't have to have it done by january either, craig. youb could have the outlines of that and nail it down the following two weeks of january. >> -- ret tro actively. >> absolutely. the treasury department doesn't have to hold the tax withholding schedule you wills if they know

they're coming to some agreement. >> i didn't mean to cut you off there. you mentioned the payroll tax and we mentioned the payroll tax holiday that was supposed to be temporary. it appears as if that's going away as part of any plan. is that safe to say? >> i think that may very well be part of it. it hits the middle class, but the bottom line is that money's supposed to be going to social security and we're paying it by other means. so eventually we've got to come back to that. if you just did that, that $120 million and that would bring us down to a 2.8% gdp growth next year. it doesn't have to be there, and i think the wiser method is to have some sort of agreement of the more wealthy and those worrying and do a principle compromise of senator mcconnell saying that is a significant part of the money and we'll take a little bit out of the domestic and defense programs and not that much and maybe a piece of

the payroll tax holiday. but you have to extend the alternative tax and that's why $3el million of the tax increase and the problem is consumer confidence had risen into the last couple of weeks and we had our investors flush with $4 trillion money to invest and they're holding back because of uncertainty and if they see our economy is growing this year and then they come to the grand bargain in february they're off and they're running. >> last question here very quickly. what happens to the estate tax? >> yes. i think you'll see a compromise where it will be $3 million to $4 million, the first dip of that amount will be tax exempt. it won't be the $5.5 million that speaker boehner wanted to and it won't be the $3.5 million that president obama proffered. we came so close and speaker boehner came almost within $500, to where they couldn't complete

it and both policymakers want to do what's right for the american economy and they won't raise the compromise and this small step, just to go with the pickal cliff. the consolidation of the economy has to be done first. >> joe sestak, author of "the bunny slope." great to have you. >> training teachers to take on the next assailant. is it the right answer to the question of how to keep your kids safe? beale talk about that. first, though, what's next for the first lady? there are some new numbers out suggesting that she could very well have a future in politics if she wants it. you're watching msnbc. [ thunder crashes ] [ male announcer ] if you think all batteries are the same... consider this: when the unexpected happens, there's one brand of battery more emergency workers trust in their maglites: duracell.

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time for citi price rewind. because your daughter really wants that pink castle thing. and you really don't want to pay more than you have to. only citi price rewind automatically searches for the lowest price. and if it finds one, you get refunded the difference. just use your citi card and register your purchase online. have a super sparkly day! ok. [ male announcer ] now all you need is a magic carriage. citi price rewind. start saving at citi.com/pricerewind. >> how about a run for office as the next chapter for meshel obama? a recent poll suggests she would

win handily if she ran against the junior incumbent senator from illinois. she'd be a breath of fresh air in washington, but mrs. obama is deny anything interest in a potential future in politics. she says it requires a lot of of patience to be in public office and that is certainly something she would know. a fast-moving winter storm moving into the northeast right now and that could mean a major travel headache for those trying to get around this holiday weekend. the weather channel's julie martin is at new york's laguardia airport. how bad is it right now, julie? >> reporter: right now we are getting a bit of a break, craig, but there is more to come with this system. it is just now a little bit south of the new york city metro area. i'm at laguardia, and i can tell you we've seen 50 or so cancellations as of this morning and this afternoon, but more likely to come as the snow really starts to work its way into the city this afternoon and this evening. we're looking to pick up anywhere say one to three inches

in manhattan and some of the higher elevations like the hudson valley and you could be looking at anywhere from 6 to 8 inches and cities like boston are going to get socked this evening and we could see anywhere up to a foot of snow in the boston area so certainly travel in and out of logan is not going to be too keen by the time tomorrow morning rolls around if you are trying to get there for the holiday destination for the new year. here in new york it's not as big of a storm as we saw in the past week where we saw hundreds of delay s a delays and cancellations. wins are no match for aviation and we saw winds upwards of 40 miles an hour. overall, system wide the situation should play better for those travelers playing in the holiday destinations. >> julie martin, we'll check back with you later, aez well.

>> up next, new developments in the latest deadly new york city subway accident. police are talking to a woman who may be behind the deadly push. up next, though, getting guns in the hands of teachers. we'll talk to one gun rights advocate who is making it a reality right now. you are watching msnbc, the place for politics. one phillips' colon health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. approved! [ phillips' lady ] live the regular life. phillips'.

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for those bright ideas to make the new year even brighter. more saving. more doing. that's the power of the home depot. start fresh and save with hdx 20 gallon totes, a special buy at just $5.88 a piece. . you've either seen those people or you are one of those people. more and more folks are struggling with the there you this season. flu cases have been rising sharply over the past several weeks. the centers for disease control are reporting widespread flu activity in 31 states. doctors say the flu season got started earlier this year, but they add it is not too late to get a flu shot. i'm craig melvin. thanks for coming back and here a a quick look for top stories right now. four people are dead after a russian plane slid off a runway

and crashed into a runway just outside moscow. there are 12 crew members onboard and no passengers. preliminary findings point to pilot error. new york police have a woman in custody in the pushing of a man in a new york city subway. police say the woman has made statements implicating herself in the killing. witnesses say the attacker had been mumbling and cursing to herself before shoving the unsuspecting victim off the platform. this is the second subway push death in new york city in less than a month. and a tragic milestone in the windy city. chicago has registered its 500th murder of the year. it happened this past week. the city has been the deadliest year there since 2008. chicago's police superintendent blames the increase on gang violence and easy access to illegal guns. when crime happens in arizona, the man who has come to be known as one of the toughest sheriff's in america mobilizes what he calls his posse.

and it should come as no surprise that maricopa county joe arpaio has called on his volunteer armed guards once again in the wake of the newtown school shootings. he's called on 300 armed volunteers to hang outside schools. it's in line with what the nra said they hope will happen nationwide. if hearing the word posse conjures up the images of the old wild west. consider this, some districts want to see armed teachers in every school, as well. chairman of the utah shooting sport council just helped train some 200 teachers in handling concealed weapons and joins me live now from salt lake city. clark, good to see you, sir. >> thank you very much. good to be her. >> the idea of arming teachers, the head of the american teachers federation calls the idea, quote, irresponsible and dangerous. how do you make sure that an amateur gun user like most teachers would be, that they're able to handle guns safely in

any circumstance? >> make no mistake, we're not talking about these folks doing tactical things inside a school against the shooter. we're encouraging them to institute the normal lockdown procedure which falls short when the shooter comes and crosses that threshold of a classroom. it doesn't take a lot of tactical training to produce otherwise discreetly maintained firearm and access to engage that shooter. that's a great option rather than putting yourself in front of the bullets. what teacher at sandy hook or columbine wouldn't have even with a little bit of training, wouldn't have had a firearm rather than put themselves in front of the bullet. just the extra option. >> you've been offering gun training for a long time, i understand. are you surprised at all by the conflict in newtown? >> i was surprised, but it's completely understanda believe because people realize how vulnerable they are and what we need to be doing is projecting that position of security on our

schools rather than projecting the vulnerability and what we have in the gun-free school zones right now is nothing, but an advertisement to the crazies out there that they're not going have any return fire. >> but clark, is it a good idea to have more guns in and around school? is it a good idea to do away with gun-free school zones. >> there are bad people with guns and good people with guns. who do you call when the shooter comes you call the good people with the guns and unfortunately they show up too late and our first response are the teachers and let's not disarm them. we give them fire extinguishers and we don't expect them to wait for the fire department. >> i don't know if that's a fair comparison. >> it is a good comparison. i mean, we're talking about waiting for the police to show up while children and teachers die. same way we do not wait for the fire department to show up to engage the fire if we have to. >> fire doesn't shoot back, though. that's the difference between the two. there seems to be a decent

measure of support for arming educators. i want to throw up the gallup poll. 64% of americans agree with you. arming one school official would be effective. a poll taken shows 54% of americans view the the national rifle association in a favorable light. so the idea of putting some fire power in schools seems to be gaining traction, but my question to you is why stop there? why not focus on some additional gun control, as well, perhaps extending waiting periods and limiting ammunition and a ban on semiautomatics. can you see those in addition to arming teachers, as well? >> if i thought that banning a specific type of firearm would help, i would be all for it, but i know for a fact, it doesn't. they have strict gun control laws in connecticut. here in utah, we've been doing this for 12 years and this is nothing new and we have one of the most permissive states for firearms and we haven't had school shootings either. >> you mentioned the ban on

specific types of guns. what about banning certain types of ammunition? what about limiting certain types of ammunition, can you see the need in that? no, it's not going do any could, if i thought it would, it would. if someone can show me definitively. who needs a 30-round clip? >> why would you -- why would you even go there? >> that's a legitimate question. who needs a 30-round clip and why? >> it's not -- it's not a matter who needs something. if i need it or if i want it and can operate safely then -- we're talking about --? why would you want a 30-round clip. >> i used a 30-round magazine because i didn't want to reload. it's not a matter of need. it's a matter of want. i mean, we're talking less than 1% of the semiautomatic rifles with these 30-round magazines are use in any crime and 1% are

used in gun crime. 3%, maximum are used in gun homicides and even if you were to get rid of all those magazines magically and the semiautomatic fire arps associated with them, you'd at the best cut down on 3%. >> chairman of the utah shooting sport counsel. thank you for your time. appreciate it. >> you're welcome. all eyes moves to the senate as they hope to hammer out a bipartisan bill to bypass the fiscal cliff. house majority leader harry reid and mitch mcconnell will work to the deadline to come up with a plan. i want to bring in budget committee member martin frost of texas, and republican strategist david winston. david was an aide to white house newt gingrich and senior adviser to gingrich's 2012 presidential campaign. good afternoon toeth bo of you. >> good afternoon. >> if congress can't come up with a bipart plan, senator reid said he will put to work the

president's plan for tax cuts for those earning less than $250,000 a year and renew unemployment benefits. is that outcome a vote on the president's smaller deal? is that a victory for the president and democrats? >> here's the problem. >> you don't know whether that can pass the house and the spooker said yes, he would bring it up, but the problem in the house is that the issue of sikh sequestration because if i understand correctly what the republicans are saying is that they will not waive sequestration unless they're offsetting budget cuts and that's $112 million and i don't know whether that could pass the house. i think it would have a chance of passing the senate. i hope they can negotiate something and i think that's the best outcome here and they ought to meet in the middle some place and raise the limit to $500,000 before you have to pay higher taxes.

i was chairman of the democratic caucus for four years. i was in congress for 26 years and we usually were able to work things out. not always, but we tried and more often than not we did reach a com from myself and actually passed some. >> he led me to me next question here, the lawmakers in d.c. seem to crawl from one crisis to the next. what has happened in d.c. over the past few years? to what can we attribute this? >> there area i variety of different things and the obvious one is we're running a national deficit at a scale that's unsustainable. when it's over $1 trillion like it's been for the last three years that will create some situations where just crisis emerged. that's the first part. the second part is the economy and not pointing fingers at anybody, but the economy is not back on track. there's still a significant level of unemployment and the amount of people who are

actually participating and the workforce is down, so you have all of the economic components of this constant situation of where there are these constant fiscal problems. having said that, one of the things that you're seeing in this particular debate and why i'm feeling better about this particular exchange is the sense that, look, when the policy outcome becomes greater than the political payoff, that's when you see bipartisan ship begin to emerge and i think what you're seeing from both sides is the policy outcome is becoming more important and you'll see it program that we'll move in that direction from the fiscal clef to the milk bill, if congress fails to act, the price of a gallon of milk could soar to $6 a gailon. it could be part any of fiscal

cliff biel. it's being held up by republicans in the house upon are they concerned that they'll be seen as the amt party? >> this is crazy. we renewed the foreign bill every five years and there'sa i lot of back and forth on this. that i can get this done. let me go back to something, craig, that we talked about a minute ago. the republicans have backed themselves into a corner where now they'll only bring something up if they had 218 votes on their own side and that means they won't negotiate on the democrats and they will have to produce votes on both sides of the aisle and that is very hard to do and when i was in congress during the '90s we had very interesting bipartisan votes and we had two resolutions authorizing the use of troops in iraq and one with bush xli and the other with bush xliii and we passed nafta on the bipartisan basis and trade relations with china on a bipartisan basis, and i'm sorry, i can't accept this

business about how the economy is so terrible and we have to act bipartisan. we have to be where the two parties can talk to each other and where the house leadership say it's my way or the highway and if we get 215 votes on my side, that's just wrong. >> go ahead, david. >> i've dealt with the speaker and that's a fundamental enter prettiation. so when the bills pass, there is a lot of support. at one point the speaker and the were are a whole lot of money to us, but in the grand scheme of things it wasn't. what happened? >> they were all ready to have this dole and the president decided to up the amount of revenue he wanted by 400 million. the speaker was clear about what

he could do and not do and at the last minute the president decided to change it. that is not my interpretation. >> what happened is the speaker has left 40 or 50 republicans, tea party, radical right-wing republicans have a veto power over everything, even if the majority of his conference was will willing to vote for something, if 40 or 50 of the more radical republicans say no, he won't bring it up. >> he supported 90% of the conference and when democrats refused to vote for anything in the house then you would -- >> guys, we'll have to -- >> we'll negotiate with them. >> we have to bring you back. we have officially run out time. . marm er marmer -- up next, the 41st president george h.w. bush said to be singing on this saturday. we'll update you on his health as he remains in a houston hospital.

and the last time congress came close to being kraing the debt ceiling the market didn't react kindly. coming up, what the fallout from the fiscal debate could look like on wall street. you are watching msnbc, the place for politics. [ laughter ]

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to a cigarette, you celebrate a little win. nicoderm cq, the patch with time release smart control technology that acts fast and helps control cravings all day long. ♪ quit one day at a time with nicoderm cq. former president george h.w. bush remains in the intensive care unit of a hospital today, but a family spokesman says the 88-year-old is in high spirits and is even singing with doctors and nurses. gabe gutierrez is in houston with the latest on 41's condition. gabe, is that true? >> reporter: yeah, craig, that's what we're hearing. he remains in intensive care here at methodist hospital in houston. he is improving and that his exchange wes doctors and nurses now include singing. the first 41st president of the united states went into the hospital in early november with

bron kitis and was released a few days later and after thanksgiving he developed a nagging cough and went back in the hospital. his family had hoped to have him back home for christmas, but that didn't happen. doctors put him in the icu last sunday and his family has not really released too much information about his treatment only saying that he's in guarded condition. this past thursday his houston chief of staff sent an e-mail to well wishers urging him to put it back in the clocket and his aides say he's in very good spirits though he's not expected to leave the hospital any time soon. >> any indication what song the president was singing with those doctors and nurses? >> they have not released that information, craig. but we have asked. >> gabe gutierrez from houston. we'll talk to you later. up next from wall street to main street, real-world impacts are falling off the so-called fiscal cliff. we'll show them to you and we'll talk about them. this is msnbc. [ dylan ] this is one way to keep your underwear clean.

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the economists, business

leaders and all think that we're poised to grow in 2013 as long as politics in washington don't get in the way of america's progress. >> president barack obama yesterday warning about the very real impact that fiscal cliff could have on this country's economy. prior to the president's statement, the gloomy outlook for a deal was evident on wall street. the dow fail 158 points or 1.2% to settle at 12,938. fifth straight day of decline on the street. i would like to bring in david nakamura of "the washington post" and david jackson of "usa today." how conscious are our leaders in d.c. of the ripple effect this could have and how conscious are consumers of what might be about to hit them? >> well, the white house is very conscious of it it. they may have the political advantage of this deal, but the fiscal cliff could tip the country back into a recession. consumers are worried they'll

start to pick up on the news and once it hits their paychecks they'll definitely feel it. >> do you think the consumers are paying as close attention as we'd like to think that they are. i think they are even though it's holiday time and going back to businesses and i was at the white house when president obama had a series of businesses with small business and big business owners and all of them had the same message. we want consumer confidence to remain strong and we want certainty for our businesses and even a ceo like lloyd blankfein of goldman sachs was out there and said he doesn't want taxes to go up on anybody, but compromise is the order of the day and from congress for business leaders. >> david jackson, you mentioned the white house has the political upper hand here. do you think if a new deal is reached that they maintain the political upper hand going into january and going into february as the debt limit negotiations start? >> that's a very good question and that's something of concern for the white house. like i say, the real fear at the

white house is that the economy will go back into recession and the white house will end up being blamed for this regardless of who may or may not be at fault right now. >> david nakamura and we alluded to this earlier that a lot of folks don't realize that this is a crisis that was created by congress. >> absolutely. a year and a half ago during the debt ceiling negotiations, they put this in place and they pushed it back to now to try to get them to this bigger deal that everybody was talking about and we had included spending cuts and a tax increase and this was supposed to be the deadline and now people are talking, can we push this back and come back and cut taxes and no one wants to make this decision, but they're going to have to soon, and i think all of this pressure on congress right now is going to lead to some sort of agreement whether it's now before january 1 or shortly thereafter, but something will happen this time. >> david jackson, if the senate can't reach a deal and there is an up or down vote, how might

that affect the way that congressional republicans vote? >> i think the white house strategy is to try to push for a vote and if it goes down to blame the republicans. either way, if there is a vote or not a vote, in the short term the republicans will take more of a hit on this. david jackson, david nakamura, we appreciate you dropping by. coming up in the next hour, what if there is no deal for weeks? it's not too early to talk about the worst of the worst case scenarios here. what you need to know and how it could affect your bank account and pocketbooks. up, in, though, tea party activists are they more influential in the fiscal cliff dealings than we, perhaps, realize? you're watching msnbc, the place for politics. [ male announcer ] feeling like a shadow of your former self? c'mon, michael! get in the game! [ male announcer ] don't have the hops for hoops with your buddies? lost your appetite for romance? and your mood is on its way down. you might not just be getting older.

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